--- title: "Alto Neuroscience amends K2 HealthVentures loan" url: "https://aibio.space/news/alto-neuroscience-amends-k2-healthventures-loan-20-0-million-funded/" publisher: "aibio.space (Biotech Investor Relations News)" date: "2025-01-16" section: "Debt Financing" tickers: "NYSE:ANRO" source: "https://www.sec.gov/Archives/edgar/data/1999480/000119312525007383/d891653d8k.htm" summary: "Alto Neuroscience's January 13, 2025 amendment lifts the maximum term loans from $35.0 million to $75.0 million and moves maturity to January 1, 2029. Only" --- By the aibio.space news desk. Sources - [Alto Neuroscience, Inc. Form 8-K filed January 16, 2025 (SEC EDGAR)](https://www.sec.gov/Archives/edgar/data/1999480/000119312525007383/d891653d8k.htm) - [Alto Neuroscience, Inc. exhibit d891653dex101.htm to the January 16, 2025 Form 8-K (SEC EDGAR)](https://www.sec.gov/Archives/edgar/data/1999480/000119312525007383/d891653dex101.htm) - [Alto Neuroscience, Inc. Form 10-K filed March 21, 2024: business overview and signatures (SEC EDGAR)](https://www.sec.gov/Archives/edgar/data/1999480/000199948024000010/altoneuroscienceinc-10xk.htm) [ANRO](https://aibio.space/companies/alto-neuroscience/) 2025-01-16 # Alto Neuroscience amends K2 HealthVentures loan, $20.0 million funded and maturity now 2029 Tickers [ANRO](https://aibio.space/companies/alto-neuroscience/) Alto Neuroscience's January 13, 2025 amendment lifts the maximum term loans from $35.0 million to $75.0 million and moves maturity to January 1, 2029. Only $20.0 million was funded at signing, and about $10 million of that went to refinance the old loan and pay fees. ## Key facts - **Company**: Alto Neuroscience, Inc. (NYSE: ANRO) - **News type**: Debt Financing - **Primary source**: [Alto Neuroscience, Inc. Form 8-K filed January 16, 2025 (SEC EDGAR)](https://www.sec.gov/Archives/edgar/data/1999480/000119312525007383/d891653d8k.htm) *A meeting room with a long table and a screen. CC0, via rawpixel. The picture shows the field, not the companies named.* Alto Neuroscience, Inc. amended its term loan with K2 HealthVentures LLC on January 13, 2025. The company reported the change in a [Form 8-K filed January 16, 2025](https://www.sec.gov/Archives/edgar/data/1999480/000119312525007383/d891653d8k.htm). ## What the amendment changes The First Amendment to Loan and Security Agreement amends a loan agreement dated December 16, 2022. K2 HealthVentures LLC is the lender and administrative agent, and Ankura Trust Company, LLC is the collateral agent. The maturity of the term loan facility moves from December 1, 2026 to January 1, 2029, and the maximum term loans rise from $35.0 million to $75.0 million. The $75.0 million is a ceiling, not cash in hand. Only a $20.0 million first tranche was funded on the Effective Date. A second tranche of up to $30.0 million is available at Alto's request until December 15, 2025, but only if the company meets milestones set out in the agreement. A third tranche of up to $25.0 million needs the lender's approval. About $10 million of the funded amount refinanced the original loan and paid fees and expenses of the amendment. The proceeds may otherwise be used for working capital and general corporate purposes. ## Cost, covenants and conversion rights The loans carry a variable cash interest rate of the Prime Rate plus 1.45%, with a floor of 8.45% a year, and a fixed paid-in-kind rate of 1.0% a year. Principal amortizes in full starting January 1, 2027, or January 1, 2028 if at least $20.0 million of the second tranche is funded. Prepaying before maturity costs a fee of 1.0% to 3.0% of outstanding principal, depending on timing. The loans are secured by a first-priority interest in substantially all of Alto's assets, excluding intellectual property. The agreement limits asset sales, mergers, new debt and liens, and dividends. From January 1, 2026, Alto must keep a cash runway of at least five months. That test is waived in any period when its market capitalization exceeds $700.0 million. The lender may convert up to $9.0 million of the loan into common stock: $4.0 million from the original agreement and $5.0 million from the amendment. The conversion price is $10.49 for the first $4.0 million and $4.8259 for the remaining $5.0 million, subject to adjustments. Conversions are capped so the lender and its affiliates cannot hold more than 9.985% of the common stock outstanding, a cap the lender can waive on 61 days' prior written notice. A separate 19.99% limit applies where New York Stock Exchange rules would require stockholder approval. The 8-K gives no cash balance or operating loss, so it cannot show how much runway Alto has against that test. ## Warrants and the company K2 HealthVentures Equity Trust LLC holds the warrants. The original warrant, for 35,773 shares expiring December 15, 2032, now carries an exercise price of $3.7122 a share after an amendment. The 8-K describes that change as a reduction but does not give the earlier price. A new warrant expiring January 13, 2035 is sized at 0.025 times the principal actually funded, divided by $3.7122. The warrant price is below both conversion prices, so the lender would pay less per share for warrant shares than for conversion shares. Those shares will be issued without registration under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D. According to its annual report for fiscal 2023, filed March 21, 2024, Alto is a clinical-stage biopharmaceutical company that uses neurobiology to develop personalized treatments for psychiatric disorders. Its pipeline has five clinical-stage assets aimed at major depressive disorder and schizophrenia. The company's stock began trading on the New York Stock Exchange on February 2, 2024, and it had 26,883,988 shares outstanding as of March 18, 2024. Amit Etkin, M.D., Ph.D., Alto's president and chief executive, signed for the company. Ben Bang, general counsel, signed for K2 HealthVentures LLC. Within 30 days, Alto must deliver an account control agreement covering its collateral account at CIBC. The 8-K refers to milestones that the loan agreement sets out but does not list them, and it presents no clinical results from the five programs. [Report an error](https://aibio.space/reputation/#correction) ## Companies in this story ANRO Alto Neuroscience, Inc. 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Cite as: aibio.space, "Alto Neuroscience amends K2 HealthVentures loan", 2025-01-16, https://aibio.space/news/alto-neuroscience-amends-k2-healthventures-loan-20-0-million-funded/